Residency or citizenship of Spain is a non-mandatory requirement for obtaining a mortgage loan for the purpose of purchasing a real estate object. Financial institutions rarely refuse to give loans to foreign citizens. Many people believe that such loans are very unprofitable. However, this is a misconception, and we’ll try to dispel it in this article.
How can a foreigner get a mortgage in 2022?
Every year, all Spanish banks introduce new mortgage programs. Until 2016, both citizens and foreigners could use only two types of interest rates: floating and fixed. Later, a combined interest rate (fixed for the first 10 years, and then floating) was integrated into the system.
Among all the restrictions for foreign citizens, we should note just the loan amount. Citizens can get a mortgage in the amount of 100% of the property cost, for foreigners the available amount is 60% to 70%.
The principle of mortgage registration in Spain is almost the same as in other countries. You need to make an initial payment, pay taxes, and so on. The estimated amount of all costs is 12% of the property value.
Mortgage for Spanish citizens
We’ve already mentioned that citizens can get a loan in the amount of 100% of the property value. However, this can’t be applied to all cases. Most often, banks issue such a mortgage for real estate objects that are listed on their balance sheets (for example, arrested objects).
You can get such loans in Banco Popular, Bankinter and Liberbank. Each bank offers unique conditions (terms, rate, etc.) for mortgage. The amounts accepted as a calculation also differ. It can be either the cost of the purchase and sale of a real estate object or the estimated cost introduced by independent experts (Informe de Tasación).
If you have a perfect credit history (without debts and late payments), and you provide evidence of the stability of your financial situation to the bank, then you’re guaranteed to get a mortgage of 100%. To prove to the bank that you’re solvent, you need to provide documents that contain data about your income for the past six months (in case you’re an individual entrepreneur). Wage workers need to provide an employment contract (contrato fijo). And their salary should be high enough. You also need to provide a bank statement that shows all the replenishments and withdrawals for the past six months.
Mortgage for non-residents of Spain
To prove their financial status, non-residents need to provide the same documents: income certificates, certificates from work, property documents, bank account statements, etc.
You should remember that the maximum mortgage quota is 30% of the total amount of your income. For example, if it’s 10,000 euros, then the maximum monthly payment amount will be 3,000 euros.
Moreover, you should update certificates from work and tax declarations every year. The state seriously fights against illegal money laundering and strongly controls sources of income.
After you register a mortgage in the bank in Spain, you’ll have 2 accounts at once – mortgage and personal. In 2013, the Spanish government introduced new laws, according to which the state authorities must regularly check financial transfers and impose sanctions for illegal transactions with currencies. Due to this, non-residents must submit relevant documents in Spanish every year.
If you need help when applying for a mortgage in Spain, then you should contact our managers for professional advice. We help both citizens of the country and non-residents.